In some ways, the recession NZ suffered wasn't that bad. The 1990-1991 crunch, for instance, saw a larger bounce in unemployment. Yet in that case, recovery was clearly under way by the 1993 election, saving Bolger's bacon. This time around there are only the barest hints of recovery. Why?

Explanation 1: The problems in the early '90s were specific to NZ, not global. There were always overseas markets to sell to. This time around all the developed economies have been hit, many worse than us.

Explanation 2: Financial crises are worse than other kinds. They leave a lot of people with substantial debt problems, making it hard to restart the economy until deleveraging has happened or evasive action is taken.

Both of these explanations are true, but is one truer than the other? Financial crises tend to be international, so it's hard to separate out their effects. The policy implications of the two views are somewhat different, though not vastly so (1 requires more internation co-ordination than 2).